Restraining Government in America and Around the World

Why a GOP Blowout May Be Bad News

I don’t know if “be careful what you wish for” is actually an ancient Chinese proverb, but it does apply to this year’s mid-term elections. Most of my GOP friends are very happy about the expected takeover of the House of Representatives, and they are keeping their fingers crossed that there will be enough big wins in Senate races to capture that chamber as well.

I certainly agree that Pelosi, Reid, et al, are a bunch of statists and that they deserve to lose, but that’s not the same as thinking that Republicans deserve to win. The GOP leaders in the House and Senate, after all, are mostly the same crowd that voted for bigger government and more intervention during the Bush years. Is there any reason to think that they’ve had epiphanies and now genuinely believe in freedom?

But even if you think that Boehner, McConnell and the rest of the Republicans now have their hearts in the right place, that doesn’t necessarily mean that it would be good for Republicans to re-take Congress. Let’s walk through the upsides and downsides.

The biggest upside, as noted above, is that the current crop of Democrats would lose. I realize it’s not nice to enjoy the misery of others, but I would take great pleasure in watching Reid and Pelosi eating crow tomorrow night as they discuss big Democratic defeats. In the same spirit, I would be happy that so many evil people would be sad, particularly the global warming fanatics and the government employee union bosses.

But I don’t think better public policy will be one of the upsides. Even if Republicans somehow win the Senate, it takes 60 votes to make big changes. That obviously won’t happen. Moreover, Obama surely would veto any reforms to shrink the burden of government.

This is a perfect segue to a discussion of the downsides of a GOP victory. One of those downsides, which already was mentioned, is that Republicans need more time in the wilderness to purge the big-government virus that ran rampant during the Bush years.

But the bigger concern is that Republican victories this year might reduce the odds for big wins in 2012. If the GOP takes full or partial control of Congress, that means they also will be at least somewhat responsible for anything that happens between now and the 2012 elections. And Obama, aided and abetted by the establishment press, will blame any bad news on Republicans.

This is the worst of all worlds. You don’t have the power to actually change policy, but you have enough power that people will blame you if they don’t like the results.

This is why the best result, from a long-term GOP perspective, is to win lots of seats, but to leave Democrats in charge of both the House and Senate. If Republicans wind up with 215 seats in the House and 49 seats in the Senate, that will be more than enough to block Obama from imposing additional bad policies (especially with the Senate filibuster). But Republicans won’t be in the difficult position of having illusory power to make changes.

And if everything goes well, this would put them in a position to enjoy big gains in 2012. That means winning the White House and capturing both chambers of Congress with big majorities.

That would please Republicans, but some of us are concerned about better public policy rather than partisan politics. So the goal is not to get more Republicans, but rather to get a Reagan-type person elected to the White House at same time that a 1994-style GOP Congress is elected.

Like this:

Related

4 Responses

I think the best outcome is a democrat in the White House and republicans controlling both houses. Already during the post 1994 Clinton years we saw such a thing i.e. republicans curbing the democrat president more power & control & tax & spend drive.

As far as I remember, when republicans, under Bush, got control of both houses and the White House they became …” the same crowd that voted for bigger government and more intervention during the Bush years “… I think being a crowd that wants bigger government is the natural state of the political class so the only way to curb down government is to have different parties in power as happened during the Clinton years. The other solution is having Calvin Coolidge reelected!

Mr Dan Mitchell says:

..” If the GOP takes full or partial control of Congress, that means they also will be at least somewhat responsible for anything that happens between now and the 2012 elections. And Obama, aided and abetted by the establishment press, will blame any bad news on Republicans”…

In My Humble Opinion (IMHO) it will not be anymore so easy to blame bad news on republicans. If there actually is such a big change in electoral sentiment that actually republicans win control of the house then if that happens it would be in part because millions do not believe anymore their keynesian “solutions”

IMHO we supply siders did a HUGE mistake when many of us never foresaw the big fall in home prices which was central in creating this crisis. We know the fall in real estate wealth was at some moment around $7 trillion, as archi keynesian Paul Krugman predicted. Arthur Laffer, for instance, one of the most prominent Supply Siders, wrote a paper called “Bursting the myth of a housing bubble”

Whether or not there was a housing bubble is a matter of discussion, but I think the fact is the fall in home prices and the 2007 “tight money” were crucial in creating the crisis. As the crisis unfolded and was blamed on republicans the crisis increased hugely the probabilities of the big-pro-tax-candidate Obama electoral victory making the crisis much worse since we already know from Mr Dan Mitchell blogs how AS the expectations of pro tax John Kerry victory ROSE the Standard & Poors stock index FELL. And a fall in the stock markets predicts a fall in private investment since a fall in the stock market means they predict a fall in earnings. And it is crystal clear that recessions mean a HUGE drop in private investment.

As Mr. Dan Mitchell said, people understand the common sense fact that if they allege to put MORE taxes on co2 or MORE taxes on cigarrettes in order to get LESS co2 and LESS cigarettes the if you allege for MORE taxes on investment and MORE taxes on employment you are actually alleging for LESS investment and LESS employment.

We know keynesian pseudoscience demonizes savings. Keynesian Paul Krugman was always tirelessly attacking Bush tax cuts on investment. Attacking tax cuts on investment is the same thing as attacking investment since most people would understand the common sense fact that MORE taxes on investment means LESS investment.

People would not understand -and not read- Krugman confuse and often bad faith columns but people would understand that Krugman -and others- were tirelessly attacking investment and savings. It is central for the keynesian pseudoscience to discredit savings and investment, demonizing the possesion of capital has always been a central position of the extreme left.

Krugman said the crisis would come, that $7 trillions in wealth would be lost. Well, it happened. People do not understand Krugman confuse keynesian columns , but they understand that he was right in predicting the crisis and that many prominent Supply Siders were downright wrong and, becauuse of that, millions believed Krugman theories were right and the Supply Sider theories wrong.

Keynesians have been extremely succesful in destroying economics science and creating an orwellian macroeconomics system were virtue is vice and vice is virtue. The austrian colossal errors during the great depression, blaming the crisis on MALINVESTMENTS and INEXISTENT “LOOSE MONEY” were CRUCIAL in bringing such a sad state of things. OUR errors allowed THEIR pseudoscience to win. Today in mainstream media and academia there is such confusion and error on macroeconomic tought that any confuse incomprehensible collection of falsehoods and logical errors can pass as “science”.

To this we must add that (libertarian) austrians give reason to keynesians by demonizing investment with their theories that allege that “MALINVESTMENT” because of inexistent “LOOSE MONEY” actually caused the Depression and the crisis.

With such big errors by us libertarians / classical liberals and with things being what they were, it is not surprising at all that many millions accepted to put the blame on republicans and supply siders. And socialist europeans answered to the crisis at lightning speed by giving the economics nobel prize to Paul Krugman. The message to the world was crystal clear: Keynesianism is RIGHT, Supply Side (classical econimics) is WRONG.

And I think the intellectual battle is esentially supply side vs keynesianism, those are the most discussed theories when growth is discussed.

But now people are seeing that their “stimulus” keynesian theories are wrong. So blaming errors on supply siders and alleging that keynesians are right will not be anymore so easy as it was.

To this one must add that the most prominent Supply Sider, Robert Mundell, has been downright in his predictions of the outcome of the crisis, one can see that in this video http://www.youtube.com/watch?v=D7TheGePl8w . That will be of enormous help in bringing back confidence to Supply Side Economics.

So I think the truth will win and I think Supply Side Economics (classical economics) is the nearest to the truth that we know. Superb blogs like this one will be crucial in bringing the truth to light.

If one accepts that housing bubbles started when the rate of change of the price of houses increased then one accepts too that the US [maybe existent] housing bubble and the french [ maybe existent ] housing bubble started around 1997 because around that year the ir a very noticeable change in the rate of increase of house prices.

Around 1997 there was “tight money” in the USA. Maybe in France too, if USA “tightens” money then the European Union (EU) may need to tighten money too in order to avoid huge quantities of money to flee to the USA to earn high interests and we may have had “tight money” both in USA and the EU.

In France -and other european countries- they may have been Real Estate bubbles too but they had no Community Reinvestment Act, no Fannie and Freddie and government taking the risk, no democrats.

So there may be a common explanation for those bubbles. That explanation may be “tight money”. After the recession caused by tight money they, of course, instaurated “loose money” but it may be “tight money” that triggered the bubbles.

I was wrong when I said in my previous post that there was no LOOSE money before this crisis. I meant that the housing bubble seems to have started under loose money. It is clear that the Standard & Poors bubble that “pooped” in 2000 started in 1995 when they started “tightenning” money.